Two phenotypically different lung cells line the alveolar epithelium. Type I cells are the most susceptible to injury due to endogenous and exogenous insults. The injured alveolar epithelium can be repaired by the proliferation and differentiation of type II cells into type I cells. The same process occurs in turnover and development of normal alveolar epithelium. However, the molecular mechanisms for this process are poorly understood. Previous studies have focused on several particular genes such as surfactant proteins or T1 alpha during phenotypical change of lung cells. Global gene expression profiles during this process have not been examined. Our long-term goal is to understand the molecular mechanisms of the differentiation of alveolar epithelial cells. In the present proposal, we will examine gene expression profiles during the differentiation of alveolar epithelial cells using the DNA microarray technique. Model systems that will be used include alveolar epithelial cell culture, animal model for hyperoxia-induced rat lung injury and repair, and fetal lung development. Specific Aim I will test the hypothesis that cell-specific genes are down- or up-regulated during the differentiation of alveolar epithelial cells. Novel markers for alveolar type I and type II cells will be identified, characterized, and used as biochemical markers for acute lung injury. Specific Aim II will determine common gene expression patterns of alveolar epithelial cells during the remodeling of injured alveolar epithelium and fetal lung development using DNA microarray and cluster analysis. In addition, target genes that are important for the differentiation of alveolar epithelial cells will be identified and their functional significance will be tested. Specific Aim III will test the hypothesis that the phenotypic change of alveolar epithelial cells is reversible based on the global gene expression using an alveolar epithelial cell signature DNA microarray. The results from this study will not only advance our understanding of cell differentiation, but also provide valuable directions toward therapeutic intervention of pulmonary diseases such as hyperoxia-induced lung injury.